Managing A Ship Management Company

1 – Office Staff

Describe about the Managing A Ship Management Company.

1a.Location of office – India

Of the three locations namely Glasgow, Singapore and India shortlisted for setting up new office for Informal Ship management Ltd it decided to opt for India as the suitable location. It is based on two factors namely the cost of real estate property of the location and potential for ship management industry. Of the three location the cost per square foot per year is 115 US$ in Glasgow, 130 US$ in Singapore and 85 US$ in India and it is the last option India that provides cost advantage. In addition India holds the 16^th position with a coastline of 7517 km and 13 major ports with 95% trade volume in maritime transport.

1b. Official language of the company

India is multi linguistic country with many languages but Hindi and English are the most spoken language in the corporate world and majority of people understands, it[1]. In regard to Informal Ship management Ltd it is decided that English will be the Official language of the company. The reason for choosing the language is the parent company is based out of UK and the Indian location Chennai is more comfortable in English than Hindi so it acts as a more effective language for communication.

1cList of job title and members associated

For Bulk carrier

Job title	Members associated
Management	Master
	Chief engineer
Operational management	Chief officer 2nd engineer
	2nd officer 3rd engineer
	3rd officer 4th engineer
	Electro Technical officer
Supports Staffs	Bonus/Store man
	chief cook
	OS/Greaser 11 steward
	AB/Greaser 1 cook

For crew

Job title	Members associated
Management	Master
	Chief engineer
Operational management	Chief officer 2nd engineer
	1st officer Cargo engineer
	2nd officer 3rd engineer
	3rd officer 4th engineer
	Electro Technical officer
Supports Staffs	Bonus/Store man chief cook
	OS/Greaser 11 steward
	AB/Greaser 1 cook

1d) Bulk Carrier

Name	Position  held	Nationality	Gross Monthly Salary	Gross annual salary	Additional Costs(Transportation + training and fringe benefits)
	Master	Indian	5600+1120+168=6888	82656	50+40+10=100
	Chief Engineer	English	4875+975+146.25=5996.25	71955	50+30+10=90
	Chief Officer 2nd engineer	Greek	3900+780+117=4797	57564	50+30+10=90
	2nd officer 3rd engineer	Scottish	2500+500+75=3075	36900	50+30+10=90
	3rd officer 4th engineer	Australian	1800+360+54=2214	26568	50+20+10=80
	Electro technical officer	Indian	2400+480+74.40=2954.4	31132.8	50+30+10=90
	Chief cook	Scottish	1225+245+36.75=1506.75	18081	50+20+10=80
	Store man	Indian	1225+245+36.75=1506.75	1808.1	20+10=30
	Greaser I cook	Scottish	1085+217+32.55=1334.55	16014.6	20+10=30
	Greaser II steward	French	870+174+26.10=1070.1	12840	20+10=30

Oil Tankers

Name	Position  held	Nationality	Gross Monthly Salary	Gross annual salary	Additional Costs(Transportation + training and fringe benefits)
	Master	Indian	5600+1120+168=6888	82656	50+40+10=100
	Chief Engineer	English	4875+975+146.25=5996.25	71955	50+30+10=90
	Chief Officer 2nd engineer	Greek	3900+780+117=4797	57564	50+30+10=90
	1st officer cargo engineer	English	3900+780+117=4797	57564	50+40+10=100
	2nd officer 3rd engineer	Scottish	2500+500+75=3075	36900	50+30+10=90
	3rd officer 4th engineer	Australian	1800+360+54=2214	26568	50+20+10=80
	Electro technical officer	Indian	2400+480+74.40=2954.4	31132.8	50+30+10=90
	Chief cook	Scottish	1225+245+36.75=1506.75	18081	50+20+10=80
	Store man and pump man	Indian	1225+245+36.75=1506.75	1808.1	20+10=30
	Greaser I cook	Scottish	1085+217+32.55=1334.55	16014.6	20+10=30
	Greaser II steward	French	870+174+26.10=1070.1	12840	20+10=30

1e)

1f Cost of the office per years

area	per feet 10 person	reception& broad room	additional space	Total space
Sq feet	1200	288	240	1728

Cost of the person per years: - 85* 1728

=$146880

Additional costs for running the offcie = $36155

Additional costs for 10 persons=$361550

For bulk  

Total cost per year for one 10 persons =$508430

Total costs For 5 bulk carrier per years=$2542150

Monthly costs for office rental for 5 bulk carrier=$211846 

For Oil tanker

For Crew costs cost for office rental = $508430

Total costs for 5 crew costs per year =$2542150

Monthly costs for office rental=$211846 

For both

Yearly costs for both crew and bulk are = $2542150*2

                                                            =$5084300

Monthly costs for both crew and bulk are= $423691

2a) identification of crewmembers and bulk carrier’s members

Members for bulk carrier

Job title	Title	No of employees
Management	Master	5
	Chief engineer	5
TOTAL		10
Operational management	Chief officer 2nd engineer	5
	2nd officer 3rd engineer	5
	3rd officer 4th engineer	5
	Electro Technical officer	5
		220
Supports Staffs	Bonus/Store	5
	man chief cook	5
	OS/Greaser 11 steward	5
	AB/Greaser 1 cook	5
		20
Total members		50

For crew

Job title	Title	No of employees
Management	Master	5
	Chief engineer	5
TOTAL		10
Operational management	Chief officer 2nd engineer	5
	1st officer Cargo engineer	5
	2nd officer 3rd engineer	5
	3rd officer 4th engineer	5
	Electro Technical officer	5
		35
Supports Staffs	Bonus/Store man chief cook	5
	OS/Greaser 11 steward	5
	AB/Greaser 1 cook	5
		15
Total members		50

2b)

Bulk Carrier

Name	Position  held	Nationality	Gross Monthly Salary	Gross annual salary	Additional Costs(Transportation + training and fringe benefits)	Total
	Master	Indian	5600+1120+168=6888	82656	50+40+10=100	82756
	Chief Engineer	English	4875+975+146.25=5996.25	71955	50+30+10=90	72045
	Chief Officer 2nd engineer	Greek	3900+780+117=4797	57564	50+30+10=90	57654
	2nd officer 3rd engineer	Scottish	2500+500+75=3075	36900	50+30+10=90	36990
	3rd officer 4th engineer	Australian	1800+360+54=2214	26568	50+20+10=80	26648
	Electro technical officer	Indian	2400+480+74.40=2954.4	31132.8	50+30+10=90	31222.8
	Chief cook	Scottish	1225+245+36.75=1506.75	18081	50+20+10=80	18161
	Store man	Indian	1225+245+36.75=1506.75	18081	20+10=30	18111
	Greaser I cook	Scottish	1085+217+32.55=1334.55	16014.6	20+10=30	16044.6
	Greaser II steward	French	870+174+26.10=1070.1	12840	20+10=30	12870
Total						372502.4

Total cost for five ships = 372502.4*5=1862512

Oil Tankers

Name	Position  held	Nationality	Gross Monthly Salary	Gross annual salary	Additional Costs(Transportation + training and fringe benefits)	Total
	Master	Indian	5600+1120+168=6888	82656	50+40+10=100	82756
	Chief Engineer	English	4875+975+146.25=5996.25	71955	50+30+10=90	72045
	Chief Officer 2nd engineer	Greek	3900+780+117=4797	57564	50+30+10=90	57654
	1st officer cargo engineer	English	3900+780+117=4797	57564	50+40+10=100	57664
	2nd officer 3rd engineer	Scottish	2500+500+75=3075	36900	50+30+10=90	36990
	3rd officer 4th engineer	Australian	1800+360+54=2214	26568	50+20+10=80	26648
	Electro technical officer	Indian	2400+480+74.40=2954.4	31132.8	50+30+10=90	31222.8
	Chief cook	Scottish	1225+245+36.75=1506.75	18081	50+20+10=80	18161
	Store man and pump man	Indian	1225+245+36.75=1506.75	18081	20+10=30	18111
	Greaser I cook	Scottish	1085+217+32.55=1334.55	16014.6	20+10=30	16044.6
	Greaser II steward	French	870+174+26.10=1070.1	12840	20+10=30	12870
Total						430166.4

Total cost for five ships = 430166.4*5=2150832

2c. Salary difference in Tanker and bulk carrier tour of duty

Tanker tour of duty is normally less than that for bulk carriers and salaries are higher. Informal Ship management Ltd will continue this difference as the salary of the crew members are fixed based on the role and responsibility and not on the tour of duty[2]. They are different for staff working in tanker and bulk carrier with the former undertaking more risk than the later in terms of operation, extra machinery and cargo tank cleaning.          

1a.Location of office – India

3a) affect of person employed and diversity of the staffs

In present, 10 members have been selected to perform the operations for one site. Thereby, while operations functions properly then it may be required more staffs to perform operations effectively[3]. Thereby it is stated that this will affects numbers of person employed. As per the diversity concern, it has been seen that office will set up in India; thereby if organization hire more person are from Indian then work culture and performance will be improved. Overall, it has been stated that diversity has not much impact on organization performance.        

 3b) determine the services for supply and management fees

Ship management costs	Chennai
Technical	4900
Crewing	2700
Fleet supports	1000
Shore premises costs	1000
Miscellaneous expenses	1000
Total costs monthly	107000
Total costs yearly	1284000

3c)

Subtracting the annual salary for both the bulk and oil tankers together with the rental from the annual management fees

1284000-(1862512+2150832+2542150) = (-5271494)

3d Company’s present state and changes required to increase profit

Informal Ship management Ltd is new company and it is in the initial stage in the business life cycle. Thus the management of the company will aim for increasing the profit for the business of the company. The strategies taken for achieving the same will be focussing on the business development aspect both for bulk cargo and for tanker[4]. It will be supported by the operation efficiency of the staff involved and it will done by developing the skill and knowledge of the worker by rigorous training in handling bulk cargo and tanker. The company will focus on the bulk cargo in the Indian market as 95% of export in terms of volume and 70% in terms of value happen by the maritime and it provides huge opportunity for Informal Ship management Ltd to increase the profit and growth the business in the country.

From the above three tasks it is evident that the shipping management company named Informal Shipping Management Ltd will be launched in the Indian city, Chennai. This is based on the justification that the cost of the real estate property compared to Glassgow and Singapore of more attractive. In addition India has 13 ports and dispatches 95% of its cargo through the Maritime transport. Moreover, the business language has been chosen as English keeping in mind the linguistic comfort ability of the Chennai corporate culture. The list of job title identified for the bulk carrier  are top management, operational management, support staff with job title like master, chief engineer, chief officer, electro technical officer, store man, chief cook and greaser. The same set of crew members are selected from the tanker business as well, the main difference is that the taker business include the cargo engineer. The salary component includes the gross salary, 20% of the full salary for national tax, 3% of the full salary for employee pension together with additional costs that include the transportation costs, training costs and the fringe benefits. The organigram has been depicted exhibiting the potential organizational structure that would be followed by the business.

1b. Official language of the company

The cost of office per year amounts to 146880US$, the total costs for the bulk carriers amount to $2542150 and for the tanker it is 2542150. The amount that the company would have to pay as the salary for the members for bulk carriers amounts $1862512 and for the oil tanker amount to $2150832.

The tanker tour of duty is less than the bulk carrier with high salary. It has been observed that the Informal Shipping Management Ltd also tends to follow the same trend since the tanker crew faces higher risk in terms of operation, extra machinery and cargo tank cleaning.

Again, it has been observed that since the company emphasizes upon conducting all the businesses in house without sub contracting any business, the company in order to enhance the efficiency of its operations can recruit more staff members so, that the work load can be reallocated and each individual members would have to work as per their expertise which would allow them to carry out the tasks which are under their own expertise. The diversity would not be affected much. Moreover, the annual fees that would be achieved by the company by offering services like technical service, crewing service, fleet support, shore premises costs and miscellaneous expenses would amount $1284000 and after subtracting the annual salary for both the bulk and oil tankers together with the rental, it is observed that the company would be suffering from loss. The company present state can be defined as an initial stage in the business life cycle of the company and it aims to increase the profit in the future. The company will use the strategy of developing the business and enhancing the skills and knowledge level of the operational staff. The focus of the company will be in the bulk cargo business as India exports 95% of cargo in terms of volume and 70% in terms value through maritime transport.

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